The Return to Volatility
Volatility was the norm in the third quarter. Whether it was the loss of five million barrels of oil per day from the drone attack on Saudi oil infrastructure, Brexit with UK Prime Minister Boris Johnson losing his majority, or Democrats announcing an impeachment inquiry, there seemed to be an endless barrage of bad news. Despite all this, the markets were mostly positive.
However, there is no doubt that we are in a global economic slowdown, but what about a recession? The signs are mostly still positive as evidenced by the chart below. For reference, in 2007 these indicators were all red ‘yes’s’, less than 12 months before the market collapse in late 2008.
Source: Manulife Investment Management. As of August 31, 2019
Market Swings
So the key figures do not show a recession is imminent. However, the reality is that no one really knows when the next recession will hit or when a major market correction will occur. Trying to time the market swings is an impossible task. The graph below shows the growth that can be missed if one had sold out of the market too early and also the missed growth after a downturn if one did not get back in in time (+44% from the trough plus 1 year).
Source: Manulife Investment Management. As of August 31, 2019
Combining Financial Plan with Investment Process
At Caldwell Wealth & Estate Advisory, we continue to stress the power of combining a comprehensive financial plan with a structured, consistent, and repeatable investment process. We believe this is the best approach for helping our clients navigate through financial markets and ultimately reach their goals and objectives.
It is our privilege to work with you and your families. We hope that you have an enjoyable Fall and holiday season. As always please call us with any questions. We look forward to speaking with you in the near future.
Third Quarter Returns
CFP, CIM, FCSI, CHS, RIS
Director, Wealth Planning Services | Caldwell Wealth & Estate Advisory Ltd.
Investment Advisor | Credential Securities
Along with helping people prepare for their financial futures through solid financial planning, Dan curates and manages the investment options for the firm.
Disclaimer
Material in Dan’s articles was prepared solely for informational purposes, does not constitute a recommendation, professional advice, an offer or an invitation by or on behalf of Caldwell Wealth & Estate Advisory to any person to buy or sell any security or adopt any investment approach, and is no indication of trading intent in any fund or account managed by Caldwell Wealth & Estate Advisory. No investment strategy or risk management technique can guarantee returns or eliminate risk in any market environment. Diversification or asset allocation does not guarantee a profit or protect against the risk of loss in any market. Unless otherwise specified, all data is sourced from Caldwell Wealth & Estate Advisory. Past performance does not guarantee future results.
Mutual funds, other securities and securities-related financial planning services are offered through Aviso Wealth, a division of Aviso Financial Inc. The information contained in this report was obtained from sources believed to be reliable; however, we cannot guarantee that it is accurate or complete. This report is provided as a general source of information and should not be considered personal investment advice or a solicitation to buy or sell any mutual funds and other securities.
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